The present subchannel analysis substantially revises the concept of engineering hot-channel factors. Previous design techniques sequentially applied hot-channel factors to the core average enthalpy rise and flow in an attempt to estimate the flow and enthalpy rise in the hottest subchannel of the core. In the present method, a three-dimensional matrix is used to represent the core. Coolant conditions within each matrix element are determined by simultaneous solution of the equations of conservation of mass, energy, and momentum. The behavior of the hot assembly is determined by superimposing the power distribution among the assemblies upon the flow distribution while allowing for flow mixing between assemblies. Another three-dimensional matrix is used to represent the subchannels within the hot assembly. Coolant conditions are obtained from solution of the continuity equations for each matrix element. The flows to and from the hot assembly, computed by the core-wide analysis, are used as a boundary condition. The local variations in power, fuel rod and pellet dimensions, and mixing within the assembly, are superimposed in these calculations in order to determine the conditions in the hot subchannel. The procedure avoids the repetitive application of penalty factors inherent in the use of the simple product of all hot-channel factors.